322 P.3d 6
Wash. Ct. App.2014Background
- Ainsworth sustained neck and back injuries in a rear-end car accident on July 14, 2010 and claimed wage loss from Contour, Inc. and Pagliacci Pizza, Inc. due to the injuries.
- Progressive initially paid Contour wage loss benefits but stopped on October 14, 2010 and paid no wage loss for Pagliacci.
- Dr. Smith released Ainsworth to work with significant restrictions on October 15, 2010, including lifting limits and rest breaks.
- Progressive denied December 2010 additional wage loss benefits for Contour and never paid any Pagliacci wage loss despite obtaining wage verification.
- Ainsworth sued for breach of contract and IFCA violations; the trial court granted partial summary judgment for $5,458.18 in unpaid benefits and treble damages under IFCA, plus fees and costs; Progressive appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Plain meaning of income continuation ends benefits | Ainsworth shows ongoing medical restrictions preventing usual work | Progressive says release to full-time work ends benefits under plain language | Yes, plain meaning ends benefits when reasonably able to perform usual occupation |
| IFCA violation based on denial of coverage or benefits | Progressive unreasonably denied coverage and payment | Sequenced denial was reasonable under policy terms | Unreasonable denial supported under IFCA; treble damages affirmed |
| Pagliacci wage loss entitlement | Pagliacci wages were lost due to accident and medical restrictions | No Pagliacci wage loss established or not paid | Entitlement shown; Progressive treated Pagliacci claim as unsupported; denial improper |
| Mitigation of damages | Ainsworth’s medical appointments were reasonably necessary | He should have mitigated by scheduling outside work hours | No genuine factual issue; no unreasonable mitigation by Ainsworth |
| Award of attorney fees under Olympic Steamship/ROW 48.30.015(3) | Fees justified for IFCA coverage/payments dispute | Fees should be limited to coverage vs. valuation | FEES awarded; dispute treated as coverage dispute favorable to insured |
Key Cases Cited
- Moeller v. Farmers Ins. Co. of Wash., 173 Wn.2d 264 (2011) (two-step coverage analysis for PIP claims; scope and exclusions)
- McDonald v. State Farm Fire & Cas. Co., 119 Wn.2d 724 (1992) (duty of insurer to prove exclusions after insured shows coverage)
- Bordeaux, Inc. v. Am. Safety Ins. Co., 145 Wn. App. 687 (2008) (liberal construction in favor of coverage where possible)
- Holden v. Farmers Ins. Co. of Wash., 169 Wn.2d 750 (2010) (interpret insurance contracts from average purchaser viewpoint)
- Olympic Steamship Co. v. Centennial Insurance Co., 117 Wn.2d 37 (1991) (fee-shifting rule for insurer-initiated actions; distinguishes coverage vs. valuation disputes)
- Leingang v. Pierce County Med. Bureau, Inc., 131 Wn.2d 133 (1997) (fee/constitutional considerations in awarding attorney's fees in similar actions)
- Tyrrell v. Farmers Insurance Co. of Washington, 140 Wn.2d 129 (2000) (narrow construction of PIP provisions cited by insurer (distinguishable))